What is Overlay in Poker?
The overlay is the amount that the poker tournament organizer has to put up in order to meet the guaranteed prize pool if not enough players buy in. This means that the poker tournament organizer is directly taking from their profit to ensure the guaranteed prize pool is met.
Overlay Poker Example:
Let’s say that a poker tournament has a guaranteed prize pool of $50,000, and the casino organizing it sets a buy-in of $100+$10. The latter amount goes to the house for organizing the event.
The $100 goes directly into the prize pool. But, in this scenario, only 400 players enter the tournament, creating a prize pool of $40,000. As the casino has set a guaranteed $50,000 prize pool, they will need to contribute the remaining $10,000. This remaining amount that the casino puts up is called the overlay.